Definition
Adjusted Net Bank Credit (ANBC)
Adjusted Net Bank Credit is the base on which a bank's priority sector lending targets are calculated, derived from its net bank credit with certain adjustments.
ANBC starts from a bank's net bank credit and adds certain investments and exposures while excluding specified items, per RBI norms. The 40% PSL requirement and its sub-targets are computed as a percentage of ANBC or off-balance-sheet exposure, whichever is higher.
Because ANBC is the denominator for PSL compliance, changes in its definition directly affect how much priority-sector lending a bank must do. The RBI updates the computation method from time to time to reflect evolving balance-sheet structures.
Related terms
- Priority Sector Lending Certificates (PSLC)Priority Sector Lending Certificates are tradable instruments that let banks meet PSL targets by buying the priority-sector lending achievement of other banks.
- Credit-Deposit Ratio (CD Ratio)The Credit-Deposit Ratio is the proportion of a bank's deposits that it has lent out as advances, measuring how aggressively it is deploying its deposit base.
- Advances (Banking)Advances are the loans a bank extends to borrowers, forming the main interest-earning asset on its balance sheet.
- Priority Sector Lending (PSL)Priority Sector Lending norms require banks to direct a minimum share of their credit to sectors such as agriculture, MSMEs and weaker sections.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.